The Primary Purpose of the Statement of Cash Flows Is

question 150

Multiple Choice

The primary purpose of the statement of cash flows is to report

• A) a company's investing transactions.
• B) a company's financing transactions.
• C) information about cash receipts and cash payments of a company.
• D) the net increase or decrease in cash.

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Definitions:

Real Rate

The interest rate adjusted for inflation, providing an idea of the true return on an investment.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Loan

A sum of money borrowed that is expected to be paid back with interest.

Investment Bank

A financial institution that acts as an intermediary in the issuance of securities and offers corporate services like mergers and acquisitions advice.